What changed in this filing

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Item 1. Financial Statements

2022-08-02 compared with 2022-05-03 · 220 added, 185 removed, 587 unchanged (41% of the section changed)

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(In thousands, except per share amounts)

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2022 2021 2022 2021

Revenue $ 657,532 $ 419,668 $ 1,242,442 $ 747,152

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Operating loss ( 70,193 ) ( 180,370 ) ( 149,725 ) ( 382,923 )

Other income (expense):

Other (expense) income:

Interest expense, net ( 66,884 ) ( 64,272 ) ( 127,942 ) ( 128,373 )

Loss on extinguishment of debt — — ( 3,533 ) —

Equity method loss ( 170 ) ( 911 )

Equity method income (loss) 186 630 16 ( 281 )

Other, net ( 43,937 ) ( 3,199 ) 147,304 8,432

Total other income (expense), net 126,480 ( 53,381 )

Income (loss) from continuing operations before income taxes 46,948 ( 255,934 )

(Benefit) provision for income taxes ( 596 ) 3,997

Income (loss) from continuing operations 47,544 ( 259,931 )

Income (loss) from discontinued operations, net of tax 134 ( 263 )

Net income (loss) 47,678 ( 260,194 )

Total other (expense) income, net ( 110,635 ) ( 66,841 ) 15,845 ( 120,222 )

Loss from continuing operations before income taxes ( 180,828 ) ( 247,211 ) ( 133,880 ) ( 503,145 )

Provision (benefit) for income taxes 5,390 ( 1,897 ) 4,794 2,100

Loss from continuing operations ( 186,218 ) ( 245,314 ) ( 138,674 ) ( 505,245 )

Loss from discontinued operations, net of tax ( 284 ) ( 81 ) ( 150 ) ( 344 )

Net loss ( 186,502 ) ( 245,395 ) ( 138,824 ) ( 505,589 )

Net income attributable to noncontrolling interests 885 459 1,157 943

Net income (loss) attributable to Sabre Corporation 47,406 ( 260,678 )

Net loss attributable to Sabre Corporation ( 187,387 ) ( 245,854 ) ( 139,981 ) ( 506,532 )

Preferred stock dividends 5,347 5,428 10,693 10,856

Net income (loss) attributable to common stockholders $ 42,060 $ ( 266,106 )

Basic net income (loss) per share attributable to common stockholders:

Income (loss) from continuing operations $ 0.13 $ ( 0.84 )

Net income (loss) per common share $ 0.13 $ ( 0.84 )

Diluted net income (loss) per share attributable to common stockholders:

Income (loss) from continuing operations $ 0.12 $ ( 0.84 )

Net income (loss) per common share $ 0.12 $ ( 0.84 )

Net loss attributable to common stockholders $ ( 192,734 ) $ ( 251,282 ) $ ( 150,674 ) $ ( 517,388 )

Basic net loss per share attributable to common stockholders:

Loss from continuing operations $ ( 0.59 ) $ ( 0.79 ) $ ( 0.46 ) $ ( 1.62 )

Net loss per common share $ ( 0.59 ) $ ( 0.79 ) $ ( 0.46 ) $ ( 1.62 )

Diluted net loss per share attributable to common stockholders:

Loss from continuing operations $ ( 0.59 ) $ ( 0.79 ) $ ( 0.46 ) $ ( 1.62 )

Net loss per common share $ ( 0.59 ) $ ( 0.79 ) $ ( 0.46 ) $ ( 1.62 )

Weighted-average common shares outstanding:

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SABRE CORPORATION

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(In thousands)

Three Months Ended March 31,

Net income (loss) $ 47,678 $ ( 260,194 )

Three Months Ended June 30, Six Months Ended June 30,

2022 2021 2022 2021

Net loss $ ( 186,502 ) $ ( 245,395 ) $ ( 138,824 ) $ ( 505,589 )

Other comprehensive income (loss), net of tax:

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Net actuarial gain, net of taxes of $ — , $( 6,153 ), $ — , $( 6,153 )

Amortization of prior service credits, net of taxes of $ — , and $ 80

— 21,347 1,671 21,347

Amortization of actuarial losses, net of taxes of $ — , and $( 481 )

Pension settlement, net of taxes of $ — , $( 973 ), $ — , $( 973 )

— 3,374 — 3,374

Amortization of prior service credits, net of taxes of $ — , $ 80 , $ — , $ 160

( 358 ) ( 278 ) ( 716 ) ( 556 )

Amortization of actuarial losses, net of taxes of $ — , $( 488 ), $ — , $( 969 )

2,210 1,688 3,993 3,363

Net change in retirement-related benefit plans, net of tax 1,852 26,131 4,948 27,528

Unrealized losses, net of taxes of $ — , and $ 1

Reclassification adjustment for realized losses, net of taxes of $ — , and $( 899 )

Unrealized losses, net of taxes of $ — , $ 29 , $ — , $ 30

( 18 ) ( 101 ) ( 18 ) ( 104 )

Reclassification adjustment for realized losses, net of taxes of $ — , $( 916 ), $ — , $( 1,815 )

244 3,189 244 6,316

Net change in derivatives, net of tax 226 3,088 226 6,212

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Other comprehensive income 1,878 29,571 4,342 29,786

Comprehensive income (loss) 50,142 ( 259,979 )

Comprehensive loss ( 184,624 ) ( 215,824 ) ( 134,482 ) ( 475,803 )

Comprehensive income attributable to noncontrolling interests ( 885 ) ( 459 ) ( 1,157 ) ( 943 )

Comprehensive income (loss) attributable to Sabre Corporation $ 49,870 $ ( 260,463 )

Comprehensive loss attributable to Sabre Corporation $ ( 185,509 ) $ ( 216,283 ) $ ( 135,639 ) $ ( 476,746 )

See Notes to Consolidated Financial Statements.

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(In thousands)

March 31, 2022 December 31, 2021

June 30, 2022 December 31, 2021

Current assets

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Stockholders’ deficit

Preferred stock, $ 0.01 par value, 225,000 authorized, 3,290 issued and outstanding as of March 31, 2022 and December 31, 2021;

aggregate liquidation value of $ 329,000 as of March 31, 2022 and December 31, 2021

Preferred stock, $ 0.01 par value, 225,000 authorized, 3,290 issued and outstanding as of June 30, 2022 and December 31, 2021;

aggregate liquidation value of $ 329,000 as of June 30, 2022 and December 31, 2021

Common Stock:

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1,000,000 authorized shares;

350,314 and 346,430 shares issued, 326,307 and 323,501 shares outstanding at March 31, 2022 and December 31, 2021, respectively

352,943 and 346,430 shares issued, 328,159 and 323,501 shares outstanding at June 30, 2022 and December 31, 2021, respectively

Additional paid-in capital 3,169,441 3,115,719

Treasury Stock, at cost, 24,007 and 22,930 shares at March 31, 2022 and December 31, 2021, respectively

Treasury Stock, at cost, 24,785 and 22,930 shares at June 30, 2022 and December 31, 2021, respectively

( 513,462 ) ( 498,141 )

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(In thousands)

Three Months Ended March 31,

Six Months Ended June 30,

Operating Activities

Net income (loss) $ 47,678 $ ( 260,194 )

Adjustments to reconcile net income (loss) to cash used in operating activities:

Net loss $ ( 138,824 ) $ ( 505,589 )

Adjustments to reconcile net loss to cash used in operating activities:

Gain on sale of assets and investments ( 180,081 ) ( 14,532 )

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Stock-based compensation expense 53,732 53,904

Loss on fair value of investment 29,520 —

Amortization of upfront incentive consideration 23,785 30,168

Loss on extinguishment of debt 3,533 —

Amortization of debt discount and issuance costs 3,438 2,853

Deferred income taxes ( 8,600 ) ( 7,292 )

Amortization of debt discount and issuance costs 7,003 6,060

Loss on extinguishment of debt 3,533 —

Dividends received from equity method investments 488 698

Provision for expected credit losses 263 ( 3,914 )

(Income) loss from discontinued operations ( 134 ) 263

Loss from discontinued operations 150 344

Pension settlement charge — 4,347

Other 3,363 238

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Net proceeds from dispositions 392,268 24,874

Purchase of investment in equity securities ( 80,000 ) —

Additions to property and equipment ( 33,384 ) ( 17,240 )

Acquisitions, net of cash acquired ( 6,986 ) —

Cash provided by investing activities 271,898 7,634

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Net payment on the settlement of equity-based awards ( 15,330 ) ( 22,016 )

Debt prepayment fees and issuance costs ( 10,185 ) —

Dividends paid on preferred stock ( 10,693 ) ( 10,856 )

Debt prepayment fees and issuance costs ( 9,747 ) —

Other financing activities ( 159 ) 842

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Balance at March 31, 2022 3,290,000 $ 33 350,314,109 $ 3,503 $ 3,143,315 24,006,846 $ ( 508,441 ) $ ( 3,007,635 ) $ ( 77,823 ) $ 9,343 $ ( 437,705 )

Comprehensive loss ( 187,387 ) 1,878 885 ( 184,624 )

Preferred stock dividends (1)

— — — — — — — ( 5,347 ) — — ( 5,347 )

Settlement of stock-based awards — — 2,629,221 26 ( 1 ) 777,678 ( 5,021 ) — — — ( 4,996 )

Stock-based compensation expense — — — — 26,127 — — — — — 26,127

Other — — — — — — — — — ( 37 ) ( 37 )

Balance at June 30, 2022 3,290,000 $ 33 352,943,330 $ 3,529 $ 3,169,441 24,784,524 $ ( 513,462 ) $ ( 3,200,369 ) $ ( 75,945 ) $ 10,191 $ ( 606,582 )

(1) Our mandatory convertible preferred stock accumulates cumulative dividends at an annual rate of 6.50 %.

Stockholders’ Equity

Stockholders’ Equity (Deficit)

Preferred Stock Common Stock Additional

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Stockholders'

Equity (Deficit)

Shares Amount Shares Amount Shares Amount

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Balance at March 31, 2021 3,340,000 33 341,562,653 $ 3,416 $ 3,009,651 22,130,174 $ ( 487,401 ) $ ( 2,365,730 ) $ ( 135,742 ) $ 7,512 $ 31,739

Comprehensive loss — — — — — — — ( 245,854 ) 29,571 459 ( 215,824 )

Preferred stock dividends (1)

— — — — — — — ( 5,428 ) ( 5,428 )

Settlement of stock-based awards — — 2,377,690 24 214 714,622 ( 9,820 ) — — ( 9,582 )

Stock-based compensation expense — — — — 29,478 — — — — — 29,478

Issuance of common stock upon conversion of exchangeable notes — — 1,269,497 12 9,813 — — — — — 9,825

Balance at June 30, 2021 3,340,000 33 345,209,840 3,452 3,049,156 22,844,796 ( 497,221 ) ( 2,617,012 ) ( 106,171 ) 7,971 ( 159,792 )

(1) Our mandatory convertible preferred stock accumulates cumulative dividends at an annual rate of 6.50 %.

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In these consolidated financial statements, references to “Sabre,” the “Company,” “we,” “our,” “ours” and “us” refer to Sabre Corporation and its consolidated subsidiaries unless otherwise stated or the context otherwise requires.

Recent Events— The travel industry continues to be adversely affected by the global health crisis due to the outbreak of the coronavirus ("COVID-19"), as well as by government directives that have been enacted to slow the spread of the virus.

As expected, this pandemic has continued to have a material impact on our consolidated financial results in the first quarter of 2022.

Despite the continued negative impacts of the COVID-19 pandemic on our business and global travel volumes, we have seen some continued improvement in our key volume metrics during the first quarter of 2022 as compared to the prior year as COVID-19 vaccines have continued to be administered and some travel restrictions have been relaxed.

While domestic bookings continue to exceed international bookings, international bookings also continue to improve, resulting in year-over-year revenue improvement.

With the continued increase in volumes, our incentive consideration costs have also increased significantly compared to the prior year.

Recent Events— The travel industry continues to be adversely affected by the global health crisis due to the outbreak of the coronavirus ("COVID-19"), including variants, as well as by government directives that have been enacted to slow the spread of the virus.

In 2020, we experienced significant decreases in transaction-based revenue in our Travel Solutions segment, including increased cancellation activity beyond what was initially estimated, as well as a reduction in SynXis Software and Services revenue in our Hospitality Solutions segment due to a decrease in transaction volumes as a result of the COVID-19 pandemic.

As expected, this pandemic has continued to have a material impact to our consolidated financial results in 2021 and 2022.

Despite the continued negative impacts of the COVID-19 pandemic on our business and global travel volumes, as COVID-19 vaccines have continued to be administered and some travel restrictions have been relaxed, we have seen gradual improvement in our key volume metrics during 2021 and 2022.

With the continued increase in volumes, our incentive consideration costs are also increasing significantly compared to 2021 and 2020.

The inputs into our judgments and estimates consider the economic implications of COVID-19 on our critical and significant accounting estimates.

Our air booking cancellation reserve totaled $ 15 million and $ 18 million as of March 31, 2022, and December 31, 2021, respectively.

Additionally, our allowance for credit losses at March 31, 2022 was $ 58 million, a decrease of $ 2 million from December 31, 2021.

The provision for credit losses for the three months ended March 31, 2022 was $ 2 million, and for the three months ended March 31, 2021 was a reversal of $ 2 million due to the recovery experienced in 2021.

Credit Losses.

Our air booking cancellation reserve totaled $ 9 million and $ 18 million as of June 30, 2022, and December 31, 2021, respectively, as cancellation activity has continued to decline over the year.

We believe our cash position and the liquidity measures we have taken will provide additional flexibility as we manage through the global economic recovery from the COVID-19 pandemic.

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however, given the magnitude of travel decline and the unknown duration of the COVID-19 impact, we will continue to monitor our liquidity levels and take additional steps should we determine they are necessary.

Subsequent to the initiation of the current military conflict in Ukraine, we terminated our distribution agreement with Public Joint Stock Company Aeroflot Russian Airlines ("Aeroflot").

In addition, air travel in and to Russia, Ukraine, and Belarus has substantially declined, including as a result of sanctions imposed on those countries.

While none of Russia, Ukraine, and Belarus constituted a significant portion of our financial results in 2021, we have experienced significantly reduced GDS bookings and passengers boarded in Russia, Belarus and Ukraine beginning in the middle of the first quarter of 2022, and these reductions are ongoing.

For reference, our Travel Solutions revenue generated in Russia represented a low-single digit percentage of our total 2019 Travel Solutions revenue.

An expansion in the scope of the current conflict or any economic disruption, or any expansion of sanctions or export controls, could have a material adverse effect on our results of operations.

Basis of Presentation— The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) for interim financial information.

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In the opinion of management, these financial statements contain all adjustments, consisting of normal recurring accruals, necessary to present fairly the financial position, results of operations and cash flows for the periods indicated.

Operating results for the three months ended March 31, 2022 are not necessarily indicative of results that may be expected for any other interim period or for the year ending December 31, 2022.

Operating results for the three and six months ended June 30, 2022 are not necessarily indicative of results that may be expected for any other interim period or for the year ending December 31, 2022.

The accompanying interim financial statements should be read in conjunction with the consolidated financial statements and related notes thereto included in our Annual Report on Form 10-K filed with the SEC on February 18, 2022 .

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Our accounting policies that utilize significant estimates and assumptions include:

(i) estimation for revenue recognition and multiple performance obligation arrangements, (ii) determination of the fair value of assets and liabilities

acquired in a business combination, (iii) the evaluation of the recoverability of the carrying value of long-lived assets and goodwill, (iv) assumptions utilized to test recoverability of capitalized implementation costs and customer and subscriber advances, (v) judgments in capitalization of software developed for internal use, (vi) the evaluation of uncertainties surrounding the calculation of our tax assets and liabilities, (vii) estimation of the air booking cancellation reserve, and (viii) the evaluation of the allowance for credit losses.

(i) estimation for revenue recognition and multiple performance obligation arrangements, (ii) determination of the fair value of assets and liabilities acquired in a business combination, (iii) the evaluation of the recoverability of the carrying value of long-lived assets and goodwill, (iv) assumptions utilized to test recoverability of capitalized implementation costs and customer and subscriber advances, (v) judgments in capitalization of software developed for internal use, (vi) the evaluation of uncertainties surrounding the calculation of our tax assets and liabilities, (vii) estimation of the air booking cancellation reserve, and (viii) the evaluation of the allowance for credit losses.

Our use of estimates and the related accounting policies are discussed in the consolidated financial statements and related notes thereto included in our Annual Report on Form 10-K filed with the SEC on February 18, 2022.

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The standard is effective for public entities for fiscal years beginning after December 15, 2022, with early adoption permitted.

We adopted this standard in the first quarter of 2022 and there was no impact to our consolidated financial statements for the three months ended March 31, 2022 as a result of the adoption.

We adopted this standard in the first quarter of 2022 and there was no impact to our consolidated financial statements for the six months ended June 30, 2022 as a result of the adoption.

Revenue from Contracts with Customers

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Timing differences among revenue recognition, unconditional rights to bill, and receipt of contract consideration may result in contract assets or contract liabilities.

The following table presents our assets and liabilities with customers as of March 31, 2022 and December 31, 2021 (in thousands).

Account Consolidated Balance Sheet Location March 31, 2022 December 31, 2021

The following table presents our assets and liabilities with customers as of June 30, 2022 and December 31, 2021 (in thousands).

Account Consolidated Balance Sheet Location June 30, 2022 December 31, 2021

Contract assets and customer advances and discounts (1)

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______________________

(1) Includes contract assets of $ 12 million and $ 11 million for March 31, 2022 and December 31, 2021, respectively.

During the three months ended March 31, 2022, we recognized revenue of approximately $ 7 million from contract liabilities that existed as of January 1, 2022.

(1) Includes contract assets of $ 11 million for June 30, 2022 and December 31, 2021.

During the six months ended June 30, 2022, we recognized revenue of approximately $ 17 million from contract liabilities that existed as of January 1, 2022.

Our long-term trade unbilled receivables, net relate to fixed license fees billed over the contractual period and recognized when the customer gains control of the software.

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The following table presents our revenues disaggregated by business (in thousands):

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2022 2021 2022 2021

Distribution $ 431,538 $ 218,245 $ 774,426 $ 370,026

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Total Sabre Revenue $ 657,532 $ 419,668 $ 1,242,442 $ 747,152

We may occasionally recognize revenue in the current period for performance obligations partially or fully satisfied in the previous periods resulting from changes in estimates for the transaction price, including any changes to our assessment of

whether an estimate of variable consideration is constrained.

For the three months ended March 31, 2022, the impact on revenue recognized in the current period from performance obligations partially or fully satisfied in the previous period is $ 24 million, which is due to the recognition of revenue that was previously deferred but became recognizable due to a change in facts and circumstances associated with an IT Solutions customer located in Eastern Europe.

For the six months ended June 30, 2022, the impact on revenue recognized in the current period from performance obligations partially or fully satisfied in the previous period is $ 25 million, which is primarily due to the recognition of revenue that was previously deferred but became recognizable due to a change in facts and circumstances associated with an IT Solutions customer located in Russia.

It is no longer considered probable that this revenue will be reversed and this amount was fully paid by the customer.

Unearned performance obligations primarily consist of deferred revenue for fixed implementation fees and future product implementations, which are included in deferred revenue and other noncurrent liabilities in our consolidated balance sheet.

We have not disclosed the performance obligation related to contracts containing minimum transaction volume, as it represents a subset of our business, and therefore would not be meaningful in understanding the total future revenues expected to be earned from our long-term contracts.

We have not disclosed the performance obligation related to contracts containing minimum transaction volume, as it represents a

subset of our business, and therefore would not be meaningful in understanding the total future revenues expected to be earned from our long-term contracts.

Acquisitions and Dispositions

Exercise of option to acquire

In July 2022, we exercised a contractually binding option to acquire the outstanding shares of an entity in the payments industry for a price determined pursuant to an independent valuation process.

Our obligation under the agreement is expected to result in a payment of approximately $ 70 million in August 2022 to the current shareholders.

We will consolidate the results of this entity from the date of acquisition, which are not expected to have a material impact on our results of operations in the current year.

AirCentre Disposition

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The net assets of AirCentre disposed of primarily included goodwill of $ 146 million, working capital of $ 17 million, and other assets, net of $ 25 million.

We recorded a pre-tax gain on sale of approximately $ 192 million (after-tax $ 121 million) in Other, net in our consolidated statements of operations for the three months ended March 31, 2022.

We recorded a pre-tax gain on sale of approximately $ 180 million, which includes an adjustment recorded in the second quarter of 2022 related to $ 12 million in contingencies identified in connection with the sale (after-tax $ 112 million) in Other, net in our consolidated statements of operations for the six months ended June 30, 2022.

In connection with the closing of the transaction, we entered into a Transition Services Agreement ("TSA") with the acquirer, under which we will provide transition services consisting of technology, administrative and other services for up to a twenty-four month period to provide for an orderly transition and facilitate the ongoing operations of the AirCentre business.

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To the extent a contract was unable to be assigned by the time of close, we will continue to invoice and collect any relevant consideration and transfer the economic benefit to the acquirer.

For the three months ended March 31, 2022, we recognized $ 1 million of income tax benefit, representing a negative effective tax rate of 1 %, compared to an income tax expense of $ 4 million, representing a negative effective tax rate of 2 % for the three months ended March 31, 2021.

The effective tax rate remained relatively flat for the three months ended March 31, 2022 as compared to the same period in 2021 .

For the six months ended June 30, 2022, we recognized $ 5 million of income tax expense, representing a negative effective tax rate of 4 %, compared to an income tax expense of $ 2 million, representing a negative effective tax rate of less than 1 % for the six months ended June 30, 2021 .

The decrease in the effective tax rate for the six months ended June 30, 2022 as compared to the same period in 2021 was primarily due to a increase in valuation allowance recorded in the current period and various discrete items recorded in each of the respective six month periods.

The difference between our effective tax rates and the U.S.

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and in certain foreign jurisdictions to realize the full benefit of its deferred tax assets.

On the basis of this evaluation, as of March 31, 2022, a cumulative valuation allowance of $ 420 million has been recorded to recognize only the portion of the deferred tax asset that is more likely than not to be realized.

On the basis of this evaluation, as of June 30, 2022, a cumulative valuation allowance of $ 443 million has been recorded to recognize only the portion of the deferred tax asset that is more likely than not to be realized.

The amount of the deferred tax asset considered realizable, however, could be adjusted if estimates of future taxable income during the carryforward period are reduced or increased.

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When facts and circumstances change, we reassess these probabilities and record any changes in the consolidated financial statements as appropriate.

Our net unrecognized tax benefits, excluding interest and penalties, included in our consolidated balance sheets, were $ 80 million and $ 85 million as of March 31, 2022 and December 31, 2021, respectively.

Our net unrecognized tax benefits, excluding interest and penalties, included in our consolidated balance sheets, were $ 81 million and $ 85 million as of June 30, 2022 and December 31, 2021, respectively.

Credit Losses

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Our allowance for credit losses relates to all financial assets, primarily trade receivables due in less than one year recorded in Accounts Receivable, net on our consolidated balance sheets.

Our allowance for credit losses for the three months ended March 31, 2022 for our portfolio segment is summarized as follows (in thousands):

Three Months Ended

March 31, 2022

Our allowance for credit losses for the six months ended June 30, 2022 for our portfolio segment is summarized as follows (in thousands):

Six Months Ended

June 30, 2022

Balance at December 31, 2021 $ 59,646

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Other ( 749 )

Balance at March 31, 2022 $ 57,516

Our provision for expected credit losses for the three months ended March 31, 2022 increased $ 4 million to a provision of $ 2 million from a reversal of $ 2 million in the same period in the prior year.

In the prior year quarter and throughout the year of 2021, we experienced the reversal of provisions recorded during 2020, as the economy began to recover and payment experience began to improve.

Macro-economic factors, including the economic downturn, lack of liquidity in the capital markets resulting from the COVID-19 pandemic and lack of additional government funding, can have a significant effect on additions to the allowance as the pandemic or the current economic environment may continue to result in restructuring or bankruptcy of additional customers.

Balance at June 30, 2022 $ 51,985

In the prior year quarter and throughout the year of 2021, we experienced the reversal of certain provisions recorded during 2020, as the economy began to recover and payment experience began to improve.

Given the uncertainties surrounding the duration and effects of COVID-19, including any variants, we cannot provide assurance that the assumptions used in our estimates will be accurate and actual write-offs may vary from our estimates.

As of March 31, 2022 and December 31, 2021, our outstanding debt included in our consolidated balance sheets totaled $ 4,749 million and $ 4,753 million, respectively, which are net of debt issuance costs of $ 43 million and $ 45 million, respectively, and unamortized discounts of $ 14 million and $ 9 million, respectively.

The following table sets forth the face values of our outstanding debt as of March 31, 2022 and December 31, 2021 (in thousands):

Rate Maturity March 31, 2022 December 31, 2021

As of June 30, 2022 and December 31, 2021, our outstanding debt included in our consolidated balance sheets totaled $ 4,749 million and $ 4,753 million, respectively, which are net of debt issuance costs of $ 39 million and $ 45 million, respectively, and unamortized discounts of $ 14 million and $ 9 million, respectively.

The following table sets forth the face values of our outstanding debt as of June 30, 2022 and December 31, 2021 (in thousands):

Rate Maturity June 30, 2022 December 31, 2021

Senior secured credit facilities:

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(1) Represents the Secured Overnight Financing Rate ("SOFR")

We had outstanding letters of credit totaling $ 13 million and $ 10 million as of March 31, 2022 and December 31, 2021, respectively, which were secured by a $ 20 million cash collateral deposit account.

We had outstanding letters of credit totaling $ 12 million and $ 10 million as of June 30, 2022 and December 31, 2021, respectively, which were secured by a $ 20 million cash collateral deposit account.

Senior Secured Credit Facilities

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The 2017 Refinancing included a $ 400 million revolving credit facility ("Revolver") as well as the application of the proceeds of the approximately $ 1,891 million incremental Term Loan B facility (“Term Loan B”) and $ 570 million Term Loan A facility (“Term Loan A”).

On August 27, 2020, Sabre GLBL entered into a Third Revolving Facility Refinancing Amendment to the Amended and Restated Credit Agreement (the "Third Revolving Refinancing Amendment") and the First Term A Loan Extension Amendment to the Amended and Restated Credit Agreement (the "Term A Loan Extension Amendment" and, together with the Third Revolving Refinancing Amendment, the "2020 Refinancing"), which extended the maturity of the Revolver from July 1, 2022 to November 23, 2023 at the earliest and February 22, 2024 at the latest, depending on certain "springing" maturity conditions as described in the Third Revolving Refinancing Amendment.

Refinancing Amendment, the "2020 Refinancing"), which extended the maturity of the Revolver from July 1, 2022 to November 23, 2023 at the earliest and February 22, 2024 at the latest, depending on certain "springing" maturity conditions as described in the Third Revolving Refinancing Amendment.

In addition to extending the maturity date of the Revolver, the 2020 Refinancing also provided that, during any covenant suspension resulting from a "Material Travel Event Disruption" (as defined in the Amended and Restated Credit Agreement), including during the current covenant suspension period, we were required to maintain liquidity of at least $ 300 million on a monthly basis, which was lowered in December 2020 from $ 450 million.

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The 2022 Refinancing included the application of the proceeds of a new $ 625 million term loan “B” facility (the “New Other Term B Facility”), borrowed by Sabre GLBL under our Amended and Restated Credit Agreement, with the effect of extending the maturity of approximately $ 623 million of the existing Term Loan B credit facility under the Amended and Restated Credit Agreement.

We recognized a loss on extinguishment of debt in connection with these transactions during the three months ended March 31, 2022 of $ 4 million and debt modification costs for financing fees of $ 1 million recorded to Other, net.

We recognized a loss on extinguishment of debt in connection with these transactions during the six months ended June 30, 2022 of $ 4 million and debt modification costs for financing fees of $ 1 million recorded to Other, net.

The New Other Term B Facility matures on June 30, 2028 and offers us the ability to prepay or repay the New Other Term B Facility after 12 months or to prepay or repay at a 101 premium before that date.

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We are further required to pay down the term loans with proceeds from certain asset sales, if not reinvested into the business within 15 months, as defined in the Amended and Restated Credit Agreement.

As of March 31, 2022, we are in compliance with all covenants under the terms of the Amended and Restated Credit Agreement.

As of June 30, 2022, we are in compliance with all covenants under the terms of the Amended and Restated Credit Agreement.

Exchangeable Notes

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During the year ended December 31, 2021, a certain holder elected to exchange $ 10 million of the Exchangeable Notes for 1,269,497 shares of common stock, which we elected to settle in shares of our common stock.

Additionally, certain holders elected to exchange $ 2 million of the Exchangeable Notes for $ 3 million in cash, which we elected to settle in cash.

As of March 31, 2022 , we have $ 333 million aggregate principal amount of Exchangeable Notes outstanding.

Additionally, certain holders

elected to exchange $ 2 million of the Exchangeable Notes for $ 3 million in cash, which we elected to settle in cash.

As of June 30, 2022 , we have $ 333 million aggregate principal amount of Exchangeable Notes outstanding.

Under the terms of indenture, the notes are exchangeable into common stock of Sabre Corporation (referred to as "our common stock" herein) at the following times or circumstances:

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• on or after October 15, 2024, until the close of business on the second scheduled trading day immediately preceding the maturity date, April 15, 2025.

With certain exceptions, upon a Change of Control or other Fundamental Change (both as defined in the indenture governing the Exchangeable Notes), the holders of the Exchangeable Notes may require us to repurchase all or part of the principal amount of the Exchangeable Notes at a repurchase price equal to 100 % of the principal amount of the Exchangeable

Notes, plus any accrued and unpaid interest to, but excluding, the repurchase date.

As of March 31, 2022, none of the conditions allowing holders of the Exchangeable Notes to exchange have been met.

As of March 31, 2022, the if-converted value of the Exchangeable Notes exceeds the outstanding principal amount by $ 150 million.

As of June 30, 2022, none of the conditions allowing holders of the Exchangeable Notes to exchange have been met.

The Exchangeable Notes are convertible at their holder’s election into shares of our common stock based on an initial conversion rate of 126.9499 shares of common stock per $1,000 principal amount of the Exchangeable Notes, which is equivalent to an initial conversion price of approximately $ 7.88 per share.

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The net proceeds received from the sale of the Exchangeable Notes of $ 336 million, net of underwriting fees and commissions, are being used for general corporate purposes.

The following table sets forth the carrying value of the Exchangeable Notes as of March 31, 2022 and December 31, 2021, (in thousands):

March 31, 2022 December 31, 2021

The following table sets forth the carrying value of the Exchangeable Notes as of June 30, 2022 and December 31, 2021, (in thousands):

June 30, 2022 December 31, 2021

Principal $ 333,220 $ 333,220

1 unchanged sentence

Net Carrying Value $ 326,427 $ 325,303

The following table sets forth interest expense recognized related to the Exchangeable Notes for the three months ended March 31, 2022 and 2021 (in thousands):

Three Months Ended March 31,

The following table sets forth interest expense recognized related to the Exchangeable Notes for the three and six months ended June 30, 2022 and 2021 (in thousands):

Three Months Ended June 30, Six Months Ended June 30,

2022 2021 2022 2021

Contractual interest expense $ 3,332 $ 3,450 $ 6,664 $ 6,900

Amortization of debt discount and issuance costs $ 559 $ 551

Amortization of debt issuance costs $ 565 $ 829 $ 1,124 $ 1,380

Hedging Objectives —We are exposed to certain risks relating to ongoing business operations.

The primary risks managed by using derivative instruments are foreign currency exchange rate risk and interest rate risk.

Forward contracts on various foreign currencies are entered into to manage the foreign currency exchange rate risk on operational expenditures' exposure denominated in foreign currencies.

Forward contracts on various foreign currencies are entered into to manage the foreign currency exchange rate risk on operational expenditures' exposure

denominated in foreign currencies.

Interest rate swaps are entered into to manage interest rate risk associated with our floating-rate borrowings.

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These agreements involve the receipt of floating rate amounts in exchange for fixed rate interest payments over the life of the agreements without an exchange of the underlying principal amount.

For derivative instruments that are designated and qualify as cash flow hedges, the effective portions and ineffective portions of the gain or loss on the derivative instruments, and the hedge components excluded from the assessment of effectiveness, are reported as a component of other comprehensive income (loss) (“OCI”) and reclassified into earnings in the same line item associated with the forecasted transaction and in the same period or periods during which the hedged transaction

affects earnings.

Cash flow hedges are classified in the same category in the consolidated statements of cash flows as the items being hedged and gains and losses on the derivative financial instruments are reported in cash provided by (used in) operating activities within the consolidated statements of cash flows.

Derivatives not designated as hedging instruments are carried at fair value with changes in fair value reflected in Other, net in the consolidated statements of operations.

1 unchanged sentence

We designated these instruments as cash flow hedges.

As of March 31, 2022 and December 31, 2021, we had no unsettled forward contracts.

Interest Rate Swap Contracts —We had no interest rate swaps outstanding as of March 31, 2022 or December 31, 2021.

Interest rate swaps matured during the year ended December 31, 2021 as follows:

As of June 30, 2022 and December 31, 2021, we had no unsettled forward contracts.

Interest Rate Swap Contracts — Interest rate swaps outstanding during the six months ended June 30, 2022 and 2021 are as follows:

Notional Amount Interest Rate

1 unchanged sentence

Designated as Hedging Instrument

$ 200 million 1 month SOFR (1)

April 30, 2022 December 31, 2023

$ 150 million 1 month SOFR (1)

June 30, 2022 December 31, 2023

$ 600 million 1 month LIBOR (2)

2 unchanged sentences

(1) Subject to a 0.5 % floor.

(2) Subject to a 1 % floor.

(3) Fixed fee of 1.71 % effective April 30, 2022, and expiring December 30, 2022, and 3.09 % effective December 31, 2022, and expiring December 31, 2023.

(4) Fixed fee of 2.79 % effective June 30, 2022, and expiring December 30, 2022, and 3.98 % effective December 31, 2022, and expiring December 31, 2023.

In April 2018, we entered into forward starting interest rate swaps to hedge the interest payments associated with $ 450 million of the floating-rate Term Loan B related to the year 2021.

In December 2018, we entered into forward starting interest rate swaps to hedge the interest payments associated with $ 150 million of the floating-rate Term Loan B for the year 2021.

On April 1, 2022, we entered into an interest rate swap to hedge the interest payments associated with $ 200 million of the floating-rate Other Term Loan B for the years 2022 and 2023.

On June 15, 2022, we entered into an interest rate swap to hedge the interest payments associated with $ 150 million of the floating-rate Other Term Loan B for the years 2022 and 2023.

We designated these swaps as cash flow hedges.

Subsequent to March 31, 2022, on April 1, 2022, we entered into an interest rate swap to hedge interest payments associated with $ 200 million of the floating rate Other Term Loan B related to the years 2022 and 2023.

The total notional outstanding of $ 200 million became effective April 30, 2022.

There are no effects of derivative instruments, net of taxes, on OCI for the three months ended March 31, 2022.

The effects of derivative instruments, net of taxes, on OCI for the three months ended March 31, 2021 are as follows (in thousands):

Amount of Loss Recognized in OCI on Derivative,

We had no derivatives designated as hedging instruments as of December 31, 2021.

The estimated fair values of our derivatives designated as hedging instruments as of June 30, 2022 are as follows (in thousands):

Derivative Assets (Liabilities)

Fair Value as of

Derivatives Designated as Hedging Instruments Consolidated Balance Sheet Location June 30, 2022

Interest rate swaps Prepaid expenses and other current assets

Interest rate swaps Other noncurrent liabilities ( 584 )

The effects of derivative instruments, net of taxes, on OCI for the three and six months ended June 30, 2022 and 2021 are as follows (in thousands):

Amount of Gains (Losses) Recognized in OCI on Derivative,

Effective Portion

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

Derivatives in Cash Flow Hedging Relationships 2022 2021 2022 2021

1 unchanged sentence

Total $ 18 $ ( 101 ) $ 18 $ ( 104 )

Amount of Loss Reclassified from Accumulated OCI into Income, Effective Portion

Derivatives in Cash Flow Hedging Relationships Income Statement Location Three Months Ended March 31,

Amount of Losses Reclassified from Accumulated OCI into Income, Effective Portion

Derivatives in Cash Flow Hedging Relationships Income Statement Location Three Months Ended June 30, Six Months Ended June 30,

2022 2021 2022 2021

Interest rate swaps Interest expense, net 244 3,189 244 6,316

9 unchanged sentences

We also consider the counterparty and our own non-performance risk in our assessment of fair value.

Financial Instruments

Assets and Liabilities that are Measured at Fair Value on a Recurring Basis

Interest Rate Swaps —The fair value of our interest rate swaps is estimated using a combined income and market-based valuation methodology based upon Level 2 inputs, including credit ratings and forward interest rate yield curves obtained from independent pricing services.

Global Business Travel Group, Inc.("GBT") Investment— In May 2022, we acquired 8 million shares of Class A Common Stock, par value of $ 0.0001 per share, of GBT for an aggregate purchase price of $ 80 million.

As of June 30, 2022, we continued to own these 8 million shares.

The terms of these shares do not contain any restrictions that would impact our ability to sell the shares in the future.

The fair value of our investment in GBT is based on its share price, a Level 1 input, as the stock is publicly traded on the New York Stock Exchange under the symbol GBTG.

The following tables present our assets that are required to be measured at fair value on a recurring basis as of June 30, 2022 (in thousands):

Fair Value at Reporting Date Using

June 30, 2022 Level 1 Level 2 Level 3

Derivatives (1)

Interest rate swap contracts $ 213 $ — $ 213 $ —

GBT Common Stock 50,480 50,480 —

Total $ 50,693 $ 50,480 $ 213 $ —

______________________

(1) See Note 7.

Derivatives for further detail.

There were no (liabilities) assets that were required to be measured at fair value on a recurring basis as of December 31, 2021.

There were no transfers between Levels 1 and 2 within the fair value hierarchy for the three and six months ended June 30, 2022.

Unrealized losses recognized during the three and six months ended June 30, 2022 from the investment in GBT totaled $ 30 million.

Other Financial Instruments

The carrying value of our financial instruments including cash and cash equivalents, restricted cash and accounts receivable approximates their fair values due to the short term nature of these instruments.

The fair values of our Exchangeable Notes, senior secured notes due 2025 and term loans under our Amended and Restated Credit Agreement are determined based on quoted market prices for a similar liability when traded as an asset in an active market, a Level 2 input.

The following table presents the fair value and carrying value of our senior notes and borrowings under our senior secured credit facilities as of March 31, 2022 and December 31, 2021 (in thousands):

The following table presents the fair value and carrying value of our senior notes and borrowings under our senior secured credit facilities as of June 30, 2022 and December 31, 2021 (in thousands):

Fair Value at Carrying Value at (1)

Financial Instrument March 31, 2022 December 31, 2021 March 31, 2022 December 31, 2021

Financial Instrument June 30, 2022 December 31, 2021 June 30, 2022 December 31, 2021

Term Loan B $ 1,123,233 $ 1,767,432 $ 1,181,871 $ 1,803,318

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We continually monitor events and changes in circumstances such as changes in market conditions, near and long-term demand and other relevant factors, that could indicate that the fair value of any one of our reporting units may more likely than not have fallen below its respective carrying amount.

We have not identified any triggering events or changes in circumstances since the performance of our annual goodwill impairment test that would require us to perform another goodwill impairment test and we did no t record any goodwill impairment charges for the three months ended March 31, 2022 or March 31, 2021..

As we cannot predict the duration or scope of the COVID-19 pandemic, future impairments may occur and the negative financial impact to our consolidated financial statements and results of operations of potential future impairments cannot be reasonably estimated but could be material.

Accumulated Other Comprehensive Loss

As of March 31, 2022 and December 31, 2021, the components of accumulated other comprehensive loss, net of related deferred income taxes, are as follows (in thousands):

March 31, 2022 December 31, 2021

As of June 30, 2022 and December 31, 2021, the components of accumulated other comprehensive loss, net of related deferred income taxes, are as follows (in thousands):

June 30, 2022 December 31, 2021

Defined benefit pension and other postretirement benefit plans $ ( 79,826 ) $ ( 84,773 )

Unrealized foreign currency translation gain 4,996 6,282

Unrealized loss on interest rate swaps 226 —

Share of other comprehensive loss of equity method investments ( 1,341 ) ( 1,796 )

3 unchanged sentences

We have elected to use excess contributions resulting from a reduction to past contribution requirements allowed by ARPA to offset remaining required contributions.

As of March 31, 2022, we have not contributed to our defined benefit pension plan in 2022 and do not expect to make any contributions for the year.

As of June 30, 2022, we have not contributed to our defined benefit pension plan in 2022 and do not expect to make any contributions for the year.

Derivatives, for information on the income statement line items affected as the result of reclassification adjustments associated with derivatives.

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In the event of our voluntary or involuntary liquidation, dissolution or winding-up, no distribution of our assets may be made to holders of our common stock until we have paid to holders of our Preferred Stock a liquidation preference equal to $ 100 per share plus accumulated and unpaid dividends.

We recorded $ 5 million of accrued preferred stock dividends in our consolidated results of operations for the three months ended March 31, 2022 and 2021.

During the three months ended March 31, 2022 and 2021, we paid cash dividends on our preferred stock of $ 5 million.

We recorded $ 5 million and $ 11 million of accrued preferred stock dividends in our consolidated results of operations for the three and six months ended June 30, 2022 and 2021, respectively.

During the three and six months ended June 30, 2022 and 2021, we paid cash dividends on our preferred stock of $ 5 million and $ 11 million.

On May 4, 2022, the Board of Directors declared a dividend of $ 1.625 per share on Preferred Stock payable on June 1, 2022 to holders of record of the Preferred Stock on May 15, 2022.

On July 27, 2022, the Board of Directors declared a dividend of $ 1.625 per share on Preferred Stock payable on September 1, 2022 to holders of record of the Preferred Stock on August 15, 2022.

Unless earlier converted, each outstanding share of Preferred Stock will automatically convert, on the mandatory conversion date, which is expected to be September 1, 2023, into shares of our common stock at a rate between 11.9048 and 14.2857 , subject to customary anti-dilution adjustments.

10 unchanged sentences

Repurchases under the Share Repurchase Program may take place in the open market or privately negotiated transactions.

During the three months ended March 31, 2022, we did no t repurchase any shares pursuant to the Share Repurchase Program.

During the six months ended June 30, 2022, we did no t repurchase any shares pursuant to the Share Repurchase Program.

On March 16, 2020, we announced the suspension of share repurchases under the Share Repurchase Program in conjunction with certain cash management measures we undertook as a result of the market conditions caused by COVID-19.

Approximately $ 287 million remains authorized for repurchases under the Share Repurchase Program as of March 31, 2022.

Approximately $ 287 million remains authorized for repurchases under the Share Repurchase Program as of June 30, 2022.

Exchangeable Notes

3 unchanged sentences

We elected to settle this conversion in shares of our common stock.

As of March 31, 2022, we have $ 333 million aggregate principal amount of Exchangeable Notes outstanding.

As of June 30, 2022, we have $ 333 million aggregate principal amount of Exchangeable Notes outstanding.

Debt for further details.

2 unchanged sentences

The following table reconciles the numerators and denominators used in the computations of basic and diluted earnings per share from continuing operations (in thousands, except per share data):

Three Months Ended March 31,

Income (loss) from continuing operations $ 47,544 $ ( 259,931 )

Three Months Ended June 30, Six Months Ended June 30,

2022 2021 2022 2021

Loss from continuing operations $ ( 186,218 ) $ ( 245,314 ) $ ( 138,674 ) $ ( 505,245 )

Net income attributable to noncontrolling interests 885 459 1,157 943

Preferred stock dividends 5,347 5,428 10,693 10,856

Net income (loss) from continuing operations available to common stockholders, basic 41,926 ( 265,843 )

Interest expense and amortization of debt discount and issuance costs for exchangeable notes, net of tax 3,074 —

Preferred stock dividends 5,346 —

Net income (loss) from continuing operations available to common stockholders, diluted $ 50,346 $ ( 265,843 )

Net loss from continuing operations available to common stockholders, basic and diluted $ ( 192,450 ) $ ( 251,201 ) $ ( 150,524 ) $ ( 517,044 )

Basic weighted-average common shares outstanding 326,573 319,755 325,124 318,700

Dilutive effect of stock options and restricted stock awards

Dilutive effect of exchangeable notes

Dilutive effect of preferred shares 39,167 —

Diluted weighted-average common shares outstanding 326,573 319,755 325,124 318,700

4 unchanged sentences

Diluted earnings per share is computed by dividing net income from continuing operations available to common stockholders by the weighted-average number of common shares outstanding plus the effect of all dilutive common stock equivalents during each period.

The diluted weighted-average common shares outstanding calculation excludes 6 million of dilutive stock options and restricted stock awards for the three months ended March 31, 2021, as their effect would be anti-dilutive given the net loss incurred in those periods.

The calculation of diluted weighted-average shares excludes the impact of 2 million and 1 million of anti-dilutive common stock equivalents for the three months ended March 31, 2022 and 2021, respectively.

The diluted weighted-average common shares outstanding calculation excludes 3 million of dilutive stock options and restricted stock awards for the three and six months ended June 30, 2022, respectively, and 5 million of dilutive stock options and restricted stock awards for the three and six months ended June 30, 2021, respectively, as their effect would be anti-dilutive given the net loss incurred in those periods.

The calculation of diluted weighted-average shares excludes the impact of 4 million and 2 million of anti-dilutive common stock equivalents for the three and six months ended June 30, 2022, respectively, and 1 million of anti-dilutive common stock equivalents for the three and six months ended June 30, 2021, respectively.

We have used the if-converted method for calculating any potential dilutive effect of the Exchangeable Notes on our diluted net income per share.

Under the if-converted method, the Exchangeable Notes are assumed to be converted at the beginning of the period and the resulting common shares are included in the denominator of the diluted earnings per share calculation for the entire period being presented and interest expense, net of tax, recorded in connection with the Exchangeable Notes is added back to the numerator, only in the periods in which such effect is dilutive.

The approximately 42 million resulting common shares related to the Exchangeable Notes are not included in the dilutive weighted-average common shares outstanding calculation for the three months ended March 31, 2021 as their effect would be anti-dilutive given the net loss incurred in the period.

The approximately 42 million and 43 million resulting common shares related to the Exchangeable Notes for the three and six months ended June 30, 2022 and 2021, respectively, are not included in the dilutive weighted-average common shares outstanding calculation as their effect would be anti-dilutive given the net loss incurred in those periods.

Likewise, the potential dilutive effect of our Preferred Stock outstanding during the period was calculated using the if-converted method assuming the conversion as of the earliest period reported or at the date of issuance, if later.

The resulting common shares are included in the denominator of the diluted earnings per share calculation for the entire period being presented and preferred stock dividends are added back to the numerator, only in the periods in which such effect is dilutive.

The approximately 39 million resulting common shares related to the Preferred Stock are not included in the dilutive weighted-average common shares outstanding calculation for the three months ended March 31, 2021 as their effect would be anti-dilutive given the net loss incurred in the period.

We lease certain facilities under long-term operating leases.

Operating lease assets are included in operating lease right-of-use (“ROU”) assets within other assets, net and operating lease liabilities are included in other accrued liabilities and other noncurrent liabilities in our consolidated balance sheets.

Our finance leases are not material to our consolidated financial statements and have been omitted from the information below.

The following table presents supplemental cash flow information related to operating leases (in thousands):

Three Months Ended March 31,

Supplemental Cash Flow Information

Cash paid for amounts included in the measurement of lease liabilities:

Operating cash flows used in operating leases $ 6,408 $ 6,162

The following table presents supplemental balance sheet information related to operating leases (in thousands):

Three Months Ended March 31,

March 31, 2022 December 31, 2021

Operating Leases

Operating lease right-of-use assets $ 93,898 $ 99,587

Other accrued liabilities 18,451 21,106

Other noncurrent liabilities 75,579 79,368

Total operating lease liabilities $ 94,030 $ 100,474

Our leases have remaining minimum terms that range between one and twelve years .

Some of our leases include options to extend for up to ten additional years;

others include options to terminate the agreement within two years .

Future minimum lease payments under non-cancellable operating leases as of March 31, 2022 are as follows (in thousands):

Year Ending December 31, Operating Leases

2022 $ 14,965

Thereafter 48,993

Total 119,617

Imputed Interest ( 25,587 )

Total $ 94,030

The approximately 39 million and 40 million resulting common shares related to the Preferred Stock for the three and six months ended June 30, 2022 and 2021, respectively, are not included in the dilutive weighted-average common shares outstanding calculation as their effect would be anti-dilutive given the net loss incurred in those periods.

Contingencies

33 unchanged sentences

The judgment in our favor on US Airways' conspiracy claim remains intact.

The lawsuit has been remanded to federal court in the Southern District of New York for further proceedings.

The trial began April 22, 2022.

We continue to believe that our business practices and contract terms are lawful.

As a result of the Second Circuit’s opinion, we believe that the claims associated with this case are not probable;

therefore, in the third quarter of 2019, we reversed our previously accrued loss of $ 32 million and do no t have any losses accrued for this matter as of March 31, 2022.

We have and will incur significant fees, costs and expenses for as long as the litigation is ongoing.

In addition, litigation by its nature is highly uncertain and fraught with risk, and it is therefore difficult to predict the outcome of any particular matter, including any changes to our business that may be required as a result of the litigation.

If favorable resolution of the matter is not reached upon remand, any monetary damages are subject to trebling under the antitrust laws and US Airways would be eligible to be reimbursed by us for its reasonable costs and attorneys’ fees.

US Airways has quantified its damages for the retrial in a range of $ 204 million to $ 299 million (before trebling), based on its payments of GDS booking fees to Sabre and depending on certain assumptions.

We believe these estimates are based on faulty assumptions and analysis and therefore are highly overstated.

In the event US Airways were to prevail on the merits of its claim, we believe any monetary damages awarded (before trebling) would be significantly less than either of US Airways’ proposed damage amounts.

Depending on the amount of any such judgment, if we do not have sufficient cash on hand, we may be required to seek private or public financing.

Depending on the outcome of the litigation, any of these consequences could have a material adverse effect on our business, financial condition and results of operations.

The lawsuit was remanded to federal court in the Southern District of New York for further proceedings.

The retrial began in April 2022.

US Airways quantified its damages for the retrial in a range of $ 204 million to $ 299 million (before trebling), based on its payments of GDS booking fees to Sabre, alleged lost profits, and certain other assumptions.

In May 2022, the jury rejected US Airways’ claim under Section 1 of the Sherman Act, finding that Sabre’s contractual terms were not anticompetitive, and found in favor of US Airways with respect to its monopolization claim for the period from 2007 to 2012 under Section 2 of the Sherman Act.

The jury, however, only awarded US Airways $ 1.00 in single damages.

Based on the jury’s

verdict, in June 2022 the court entered final judgment in favor of US Airways in the amount of $ 3.00 , which is three times the jury’s award of $ 1.00 as required by the Sherman Act.

We have paid US Airways $ 3.05 to satisfy this portion of the judgment.

Neither party has filed an appeal, and the period to file a timely appeal has passed.

In addition, the court’s entry of judgment regarding the monopolization claim under Section 2 of the Sherman Act entitles US Airways to receive reasonable attorneys’ fees and costs under the Sherman Act.

US Airways has not filed its motion seeking attorneys’ fees and costs to date.

We are currently unable to estimate these reasonable attorneys’ fees and costs;

therefore, we do not have any losses accrued for this matter as of June 30, 2022.

American Airlines Commercial Litigation

6 unchanged sentences

We could incur significant fees, costs and expenses for as long as the litigation is ongoing.

If we cannot resolve this matter favorably, we could be limited in our ability to utilize New Airline Storefront and make the value-based incentive payments until our contract with American Airlines terminates.

If we cannot resolve this matter favorably, we could be limited in our ability to develop and use innovative new displays and make the value-based incentive payments until our contract with American Airlines terminates.

Furthermore, if this dispute were to result in the termination of our distribution contract with American Airlines, we may be unable to negotiate a new contract with American Airlines on as favorable terms or at all, which could have a material adverse effect on our business, financial condition and results of operations.

17 unchanged sentences

The DIT also assessed taxes on a similar basis plus some additional issues for assessment years ending March 2006 through March 2018 and appeals for assessment years ending March 2006 through March 2016 and March 2018 are pending before the ITAT or the High Court depending on the year.

If the DIT were to fully prevail on every claim against us, including SAPPL, we could be subject to taxes, interest and penalties of approximately $ 45 million as of March 31, 2022.

If the DIT were to fully prevail on every claim against us, including SAPPL and other group companies, we could be subject to taxes, interest and penalties of approximately $ 49 million as of June 30, 2022.

We intend to continue to aggressively defend against each of the foregoing claims.

44 unchanged sentences

We intend to vigorously defend our positions against any claims that are not insignificant, including through litigation when necessary.

As of March 31, 2022, we do not believe that an adverse outcome is probable with respect to current outstanding claims;

As of June 30, 2022, we do not believe that an adverse outcome is probable with respect to current outstanding claims;

as a result, we have not accrued any material amounts for exposure related to such contingencies or adverse decisions.

3 unchanged sentences

the manner in which our operations are managed;

the criteria used by our Chief Executive Officer, who is our Chief Operating Decision Maker ("CODM"), to evaluate segment performance;

the criteria used by our President, who is our Chief Operating Decision Maker ("CODM"), to evaluate segment performance;

the availability of separate financial information;

10 unchanged sentences

The majority of the intersegment revenues and cost of revenues are fees charged by Travel Solutions to Hospitality Solutions for hotel stays booked through our GDS.

Segment information for the three months ended March 31, 2022 and 2021 is as follows (in thousands):

Three Months Ended March 31,

Segment information for the three and six months ended June 30, 2022 and 2021 is as follows (in thousands):

Three Months Ended June 30, Six Months Ended June 30,

2022 2021 2022 2021

Travel Solutions $ 599,149 $ 373,385 $ 1,133,147 $ 662,260

2 unchanged sentences

Total revenue $ 657,532 $ 419,668 $ 1,242,442 $ 747,152

Adjusted Operating Income (Loss) (a)

Adjusted Operating Loss (a)

Travel Solutions $ 57,884 $ ( 67,182 ) $ 103,190 $ ( 173,315 )

15 unchanged sentences

______________________

(a) The following table sets forth the reconciliation of operating loss in our statement of operations to Adjusted Operating Loss (in thousands):

Three Months Ended March 31,

(a) The following table sets forth the reconciliation of operating loss in our consolidated statements of operations to Adjusted Operating Loss (in thousands):

Three Months Ended June 30, Six Months Ended June 30,

2022 2021 2022 2021

Operating loss $ ( 70,193 ) $ ( 180,370 ) $ ( 149,725 ) $ ( 382,923 )

Equity method loss ( 170 ) ( 911 )

Equity method income (loss) 186 630 16 ( 281 )

Acquisition-related amortization (1)

1 unchanged sentence

Restructuring and other costs (2)

4,336 ( 856 ) 4,336 ( 5,991 )

Acquisition-related costs (3)

2,245 1,709 5,909 2,429

Litigation costs, net (4)

12,539 11,521 16,014 12,251

Stock-based compensation 26,127 29,478 53,732 53,904

2 unchanged sentences

(1) Acquisition-related amortization represents amortization of intangible assets from the take-private transaction in 2007 as well as intangibles associated with acquisitions since that date.

(2) Restructuring and other costs represent charges, and adjustments to those charges, associated with business restructuring and associated changes, as well as other measures to support the new organizational structure and to respond to the impacts of the COVID-19 pandemic on our business, facilities and cost structure.

(2) Restructuring and other costs represents charges, and adjustments to those charges, associated with planning and implementing business restructuring activities, including costs associated with third party consultants advising on our business structure and strategy going forward which are integral to the restructuring plan and will result in severance benefits related to employee terminations, which primarily occurred in July 2022.

During 2021, adjustments to charges were recorded in conjunction with the changes implemented in 2020 to support the new organizational structure and to respond to the impacts of the COVID-19 pandemic on our business, facilities and cost structure.

(3) Acquisition-related costs represent fees and expenses incurred associated with acquisition and disposition-related activities.

2 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements